NOTICE OF DISCIPLINARY ACTION

FILE NO.:

CBOT 11-8698-BC

MEMBER:

Term Commodities Inc.

CBOT RULE VIOLATION:

CBOT Rule 854 Concurrent Long and Short Positions

B. Concurrent long and short positions in physically delivered contracts that are held by the same owner during the delivery month and two business days prior to the delivery month must be offset by transactions executed in the market, by allowable privately negotiated transactions, or fulfilled through the normal delivery process, provided however that trades may be transferred for offset if the trade date of the position being transferred is the same as the transfer date. Such positions may not be offset via netting, transfer, or position adjustment except to correct a bona fide clerical or operational error on the day the error is identified and provided that the quantity of the offset does not represent more than one percent of the reported open interest in the affected futures contract month.

FINDINGS:

Pursuant to an offer of settlement in which Term Commodities Inc. (“Term”) neither admitted nor denied the rule violation upon which the penalty is based, on July 1, 2014, a Panel of the CBOT Business Conduct committee found that it has jurisdiction over Term because it is a CBOT member and on October 4, 2011, during the October 2011 Soybean Meal futures contract delivery period, Term submitted a position adjustment to its concurrent long and short position that exceeded one percent of the reported open interest in the contract. The Panel found that this conduct violated CBOT Rule 854.B. (Concurrent Long and Short Positions).

PENALTY:

In accordance with the settlement offer, the Panel ordered Term to a pay a fine of $15,000.

EFFECTIVE DATE:

July 3, 2014